With less than four months to go before the first legal sales of adult-use marijuana are supposed to begin in Massachusetts, the agency tasked with overseeing the cannabis industry has finalized its regulations.
The Cannabis Control Commission voted unanimously to accept the rules that will govern the new legal industry. Commission Chair Steve Hoffman said he doesn’t anticipate any potential roadblocks between now and July 1 when the first licensed retail stores will be allowed to open.
“We need to make sure we have all of our staff in place. We need to make sure that our technology is in place. We need to continue to collaborate with the cities and towns around the state to make sure they’re comfortable and that our process works with their process,” Hoffman said shortly after the commission’s vote.
“I wouldn’t call any of those roadblocks,” he added. “It’s just things that we have to continue to work on between now and July 1.”
Backers of the 2016 referendum that legalized recreational marijuana are generally pleased with the regulations.
“I think the Commission has done a laudable job in making sure that the regulations are in place in a timely manner, and for the most part they seem to be very workable regulations,” said Will Luzier, political director of the Marijuana Policy Project of Massachusetts.
The commission will begin accepting applications for licenses to operate cannabis businesses on April 1.
Here are four key changes to the regulations since they were initially approved last December:
1. No social consumption or home delivery, for now
The biggest change is that there will be no cannabis cafes, or weed delivery services until next year, at the earliest.
The hold off on social consumption in public establishments came following an outcry from Gov. Charlie Baker, Attorney General Maura Healey and many members of the state Legislature. The Commission initially said they would issue licenses to businesses where patrons would be allowed to consume cannabis on-premises. There would have been two types of licenses: a primary license, in which more than 50 percent of the business’ revenues would come from the sale of cannabis; and a mixed-use license, in which places like restaurants, theaters and yoga studios would allow patrons to purchase cannabis products to be consumed during another activity, such as dining, watching a movie or taking a yoga class. Cannabis sales in businesses with mixed-use licenses would need to represent less than 50 percent of the company’s revenues.
Supporters of social consumption licenses argued they were needed to give people a legal place to go to consume marijuana, since some landlords and housing units would likely prohibit tenants from partaking. But opponents successfully argued that the commission should start out slow by, for now, only licensing brick and mortar retail stores where consumers could purchase their cannabis.
The commission also agreed to hold off on allowing home delivery, which was initially OK’ed in December. The panel did reach a compromise that they will revisit the topic after the initial rollout of retail stores on July 1. That discussion will take place after more data are compiled and input has been received from the Cannabis Advisory Board in October, with a decision made by February. It was also agreed that social consumption and home delivery licenses will, for a time, be issued only to so-called “equity applicants,” which are applicants that come from mostly minority communities that were disproportionately harmed by the war on drugs.
2. Dispensaries must set aside product for registered patients
Registered marijuana patients in Massachusetts have had access to legal marijuana products at licensed dispensaries since 2015. Many of those patients fear there will be a stampede on July 1, when several of those dispensaries seek to also offer adult-use marijuana to anyone over the age of 21. The patients successfully convinced the Cannabis Control Commission to require that those dispensaries set aside 35 percent of their product, or a six-month average of their medical marijuana sales, for registered patients. Registered patients will also, at least for the time being, not have to stand in line with the general public to purchase what many consider their necessary medicine.
3. Cultivators capped at 100,000 square feet
Initially, the CCC was set to allow cultivators to grow as large as they wanted, provided they applied for the appropriate license and pay the corresponding fee that increased as the size of the grow increased.
The commission heard feedback during the public comment period that not having a cap could create a situation where a cultivator was growing so much product, it might be tempting to divert some of that product out of state, or to the unregulated (black) market. The commission decided a 100,000-square-foot (2.3-acre) cap would help discourage diversion, as well as discourage huge agri-cannabis companies from forming and taking hold of the market.
The commission set up a tiered system where a cultivator would initially decide how much product they wished to grow. For example, a cultivator that wanted to grow 60,001 square feet of cannabis would be in Tier 8, meaning they could grow up to 70,000 square feet. Upon annual renewal, the cultivator would have to demonstrate to the commission that they have sold 70 percent of what they have grown. If they did not, or grew less than 60,001 square feet, they would be bumped down to Tier 7, meaning they could grow between 50,001 and 60,000 square feet of cannabis. The rationale behind this is to make sure enough marijuana is grown for the demand of the legal market, but not so much that there is a surplus that could potentially be diverted.
4. People convicted of trafficking hard drugs essentially barred from industry
This was the most passionate discussion by the commission members over changes to the regulations. Commissioner Britte McBride, an attorney, proposed that given the fact the U.S. Justice Department has repealed the Cole Memo, the Obama-era guidance that allowed states to set up legal cannabis industries despite marijuana being federally banned, it would be best to prohibit convicted drug traffickers (other than those found guilty of trafficking in marijuana) from working in the new industry. McBride’s argument was that to allow convicted traffickers to take part in the regulated industry might attract unwanted attention from federal prosecutors, and ultimately, bring the entire industry down.
Commission Chair Steven Hoffman and member Shaleen Title, who is also a lawyer, disagreed, saying it was unfair to prohibit someone who had paid their debt to society from finding work in the new industry. Ultimately, the commission voted 3-2 in favor of the prohibition. However, they did include language that would allow convicted drug traffickers to be licensed to work for a marijuana business provided that the individual has no direct contact with any cannabis product.